The internet is full of financial advice. What stocks to buy, when to do this, so-and-so is supposedly doing this… The problem with following what people say – even if they are legitimately well-informed and worthy of having an opinion (which is a matter in itself) – is that you don’t know what got them into a trade and you don’t know when to get out. They could also be giving advice and not actually have any skin at all in whether that outcome occurs. Also, if you’re new to any subject, it is very difficult to ascertain who is informed and believable and who isn’t. So you might end up trusting the wrong sources. That can include company management, fund managers, bloggers, journalists, investment banks (which are full of salespeople), and other parties who have their own motivations. Too many newcomers become attracted to somebody’s personality, charisma, style, and other superficial factors rather than focusing on whether that source of information is reliable and trustworthy in the first place. Or place trust into pieces of information that are ostensibly compelling but fundamentally flawed. For example, 45 days into a quarter, large managers release 13-F filings, supposedly showing their stock portfolios. However, this is merely a regulatory hoop that some firms have to jump through and typically provides little information about what they’re doing or what they think. It excludes short positions, derivatives, and positions in other asset classes, provides merely a snapshot of the composition of cash equities held long and options subject to 13-F requirements, and is released with a 6-7 week delay. Some firms hold positions for fractions of a second, not making an end-of-quarter holding report particularly relevant. In other cases, some funds are not run with one person or a committee controlling all decisions, but rather have teams that work independently from each other. One team can be long something and another can be short that same instrument. Both will have different reasons and different timeframes, and both can be good decisions. So, for various reasons, these documents give a misleading and unreliable picture of a portfolio's holdings. Because Warren Buffett apparently owns a certain stock doesn’t mean it’s a good idea to follow him into that. Only you know your personal goals, time horizon, risk tolerance, and other such matters. Beware of “hot tips” and superficial commentary. Beware of having opinions without doing any personal analysis on that particular thing. Having an informed opinion on something you haven’t analyzed and that’s not within the scope of your professional background is highly unlikely. If you’re a beginning poker player, you might be able to sit down with the top players in the world and win a hand here and there, which will supercharge your confidence. But in the end, you’re almost guaranteed to lose because your level of expertise compared to the aggregate level of skill you’re going up against is low. Those in the early stages of beginning something are the most likely to overestimate their own competencies. Overall, when determining credibility, the number one thing is transparency. Track records matter. That doesn’t mean someone is guaranteed to continue producing those results. But if someone has accomplished something, preferably multiple times, it increases the odds that they have the capabilities to continue what they’re doing. A Better Gauge of Transparency Novoadvisor is a platform that is fundamentally about crowdsourcing investment ideas and sharing them with a broader community of traders and investors. Each profile shows full transparency over virtually everything you need to know to make a decision as to whether it fits your personal needs and expectations. This includes returns, drawdowns, performance trends, holdings and percentage allocations, a computer- and/or user-generated synopsis of the trading style, popularity based on follower count, and any relevant trading activity. On the left side of the screen, you have filters to help narrow down your search, such as tickers within the portfolio, the time period, yield, trade activity, and drawdown. On the right, you have the strategy name to get a feel for the theme (if applicable), yield and drawdown over the past year, the top positions in their portfolio, the relative level of trading activity (low, medium, high), and the number of followers. For example, we can see that this portfolio focuses on dividends from the preview: And we see the usual names that in the portfolio offering dividends mostly in the 2% to 6% range, including $XOM $CVX $T $MMM $PG and $KO. (Source: Portfolio Page) The portfolio below takes more concentrated positions in smaller stocks: (Source: Portfolio Page) It naturally has a more volatile nature to it. The portfolio turnover is also relatively high, which places more importance on the manager’s trading skill relative to a more passively held dividend portfolio: All trades are recorded and time-stamped. Allocations by security and percentage of the overall portfolio are kept up-to-date in real-time, and returns and drawdowns over multiple timeframes are available to see. In Sum For anyone just beginning on a new endeavor the main problem you face is understanding as accurately as possible what’s true so you can make the best decisions possible. Having totally perfect information is never possible. Being able to deal well with what you don’t know is more important than whatever it is that you do know. Transparency is important to better gauge someone’s credibility and their ability to successfully do the thing that they’re trying to do. In order to make quality decisions and better interpret how well someone can help you, you need to understand their capabilities. Track records are important to have in mind and this is what Novoadvisor holds at the center of its platform. There are thousands of traders on Novoadvisor where you can check out strategies of interest, track their progress over time, and generate trade ideas for your own portfolio.